London pre-open: Stocks seen higher ahead of services data

London stocks were set to rise at the open on Wednesday, taking their cue from a positive session on Wall Street as investors awaited the latest reading on the UK services sector.

The FTSE 100 was called to open 33 higher at 6,550.

Naeem Aslam, chief market analyst at Ava Trade, said: "European and US stocks soared yesterday, and they are set to extend their gains today.

"There is no doubt that there is strong demand for riskier assets, and risk-off derivatives have fallen out of love- for now. Looking at yesterday’s European GDP numbers, investors are clear that economic damage hasn’t been as worse as they thought, especially that the Q4 GDP number was a lot more promising. Having said that, the extension of the current lockdown and the EU failing to get mass people vaccinated means that we are bound to see some economic weakness during the first quarter of this year."

On the data front, investors will be eyeing Markit’s UK services PMI for January at 0930 GMT.

In corporate news, Vodafone said it was confident about the outlook for annual results after its German business drove a return to organic growth in the third quarter.

Organic service revenue rose 0.4% in the three months to the end of December to €9.36bn compared with a 0.4% drop in the previous quarter. Organic service revenue rose 1% to €2.91bn in Germany.

Total revenue fell 4.7% to €11.2bn. Vodafone reaffirmed its guidance for annual earnings before interest, tax, depreciation and amortisation of between €14.4bn and €14.6bn.

GlaxoSmithKline and CureVac announced a new €150m collaboration to develop a vaccine to combat emerging variants of Covid-19. GSK added that it would also support the manufacture of up to 100m doses of CureVac's first generation Covid-19 vaccine candidate CVnCoV in 2021.